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An evaluation for the gulf in beef prices?

04 October 2012

National Beef Association members in Northern Ireland are fully behind Livestock and Meat Commission (LMC) plans to commission an independent evaluation of the reasons for the gulf between average beef cattle prices in the Province and those paid elsewhere in the UK

They are aghast at the vast 30p-48p difference, the equivalent of £108-£172 per head on an average weight carcase, between regional averages for R4L steers on the mainland compared with Northern Ireland and are relieved that, at last, an organisation that represents the beef industry, and not just farmers, has decided a spotlight must be shone on the causes of this abnormality.

“Price differentials of that depth on cattle that are similarly bred, similarly fed, and sold to the same markets must be explained and breeders and feeders are already looking forward to reading the conclusions reached by the LMC’s independent appointees – which are expected to be released before the end of the current financial year,” said the Association’s Northern Ireland chairman, Oisin Murnion.

“As far as our members are concerned they cannot come soon enough. They just do not understand why the value of the stock they produce is under so much negative pressure.”

Processors in the Province, represented by the Northern Ireland Meat Exporters Association (NIMEA), have welcomed the LMC’s commitment to discover exactly what is behind the scale of current prime cattle price differentials across the UK - and this too pleases the NBA’s Northern Ireland members.

“However they have also noticed that NIMEA has already said that in recent weeks its members have been handling exceptionally large kills – but has failed to mention that on occasions up to 13 per cent of recent intakes have been imported directly for slaughter from the ROI where cattle are even cheaper,” said Mr Murnion.

“On top of this NIMEA has also claimed that retail demand for NI beef within GB is at a low ebb – although steadily rising prices for GB cattle over September, and regular reports on supermarket sales from the independent Kantar World Panel, indicate that the opposite is the case”.

“In fact Kantar confirmed that over the 12 months ending August 5th the average retail price of fresh beef rose by seven per cent to £6.64 a kilo. Crucially, despite this, consumers spent five per cent more on buying beef and an additional £87 million was paid by them collectively to make sure they could purchase what they wanted.”

“This vast sum demonstrates that UK consumer enthusiasm for beef is undimmed by higher shop prices and is completely at odds with NIMEA’s insistence that its members have not been able to lift cattle prices because their margins are heavily squeezed by retailer customers who have been forced to hold down their prices too.”

“When the LMC’s investigators are appointed the NBA will assist their probe by drawing attention to the contradiction between NIMEA claims that retail trading conditions are tough and Kantar confirmation that supermarket customers have been spending millions of pounds more on beef than they have in the past.”

“This retail buoyancy is at odds with the depressed prices being paid to finishers. The NBA urges NIMEA members to take account of sunny, mainland, retail conditions by quickly lifting NI cattle prices above the 345p average being paid across Southern England – which has the lowest prices on the British mainland,” Mr Murnion added.

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